ADALYA JOURNAL ISSN NO: 1301-2746 A STUDY ON FINANCIAL HEALTH OF AXIS BANK AND HDFC BANK *Dr. B.Sudha., M.Com., M.Phil., Ph.D., **Mr. P.Rajendran., M.Com., M.Phil., ABSTRACT The banking sector is a service sector and it is one of the components of financial system. Banking role is more important for development of our economy. Banking institutions in our country had assigned a vital role in financing the process of planned economic development. The efficient and competition of banking system defined the strength of the economy. Indian banking sector play vital role to development of our economy. This study conducted by the researcher to analyses the financial performance of the two largest private sector banks i.e. Axis Bank and HDFC Bank. The study covers the period of five financial years i.e. 2013-14 to2017-18. The data was collected from the annual reports, websites, relevant articles and newspapers. Data analyzed through various statistical tools and ratio analyses are used. For instance, loans and advances to deposits ratio, interest expenses to total expenses, interest income to total income, other income to total income, net profit to total income, net worth ratio, percentage change in total income, percentage change in total expenditure, percentage change in advances and percentage change in deposits. Mean, standard deviation, standard error, co-efficient of variation and compound annual growth rate (CAGR) had used to find the performance of the banks. The research article concluded that the overall performance of the banks is HDFC Bank is better than the Axis Bank during the research period. KEY WORDS: AXIS Bank, HDFC Bank, ratio analysis, financial health, mean, CAGR. _____________________________________________________________________________________ *Assistant Professor in Commerce, Department of Commerce, Periyar University College of Arts and Science, Pappireddipatti, Dharmapuri (D.t), Tamil Nadu, India. **Part – Time Research Scholar & Assistant Professor in Commerce, K.S.Rangasamy College of Arts and Science (Autonomous), K.S.R KalviNager, Tiruchengode – 637215, Tamil Nadu, India, Volume 8, Issue 11, November 2019 137 http://adalyajournal.com/ ADALYA JOURNAL ISSN NO: 1301-2746 1. INTRODUCTION Banking sector is a core segment of the Indian financial system. It is a backbone of an Indian economy. It helps national and worldwide economic development. It is one of the important performers in the banking industry. In the recent studies banking services are highlighted. There had been covered lot of literature for this study. The banks are including public sector banks, old and new private sector banks, foreign banks etc. Financial sound is a key factor of banking. Financial performance is an important measure of economic and financial development of the country. Financial soundness of the banking sector means efficiency, profitability, liquidity and stability position of bank. The study deals with financial health of new private sector banks using through various ratios and statistical tools. Profile of Axis Bank Axis Bank is the third largest private sector bank in India. It also one of the first new generation private sector banks to have begun operations in 1994. The bank was promoted in 1993, jointly by specified undertaking of Unit Trust of India (SUUTI) then known as Unit Trust of India. Its head office in Mumbai, Maharashtra, 4,050 branches, 11,801 ATMs, and 4,917 cash recyclers spread across the country as on 31 March 2019 and ten international offices. The first branch was inaugurated on 2nd April 1994 in Ahmedabad by Dr. Man Mohan Singh the then finance minister of India. The administrator of the UTI is LIC, GIC, NIC, the New India Assurance Company, the Oriental Insurance Corporation and United India Insurance Company. With effect from July 30th 2007 UTI Bank changed its name to Axis Bank. Profile of HDFC Bank HDFC Bank Limited (Housing Development Finance Corporation) was incorporated in August 1994 with its registered office in Mumbai, India. HDFC Bank commenced operations as a scheduled commercial bank in January 1995. HDFC was amongst the first to receive an „in principle‟ approval from the Reserve Bank of India (RBI) to set up a bank in the private sector. The bank at present has an enviable network of over 4,805 branches spread over cities across India. All branches are linked on an online real time basis. Customers in over 500 locations are also servicing through telephone banking. The bank also has a network of about over 12,860 networked ATMs 2,657 across cities and towns. HDFC Bank provides a number of products and services including wholesale banking and retail banking, treasury, auto loans, two wheeler loans, Volume 8, Issue 11, November 2019 138 http://adalyajournal.com/ ADALYA JOURNAL ISSN NO: 1301-2746 personal loans, loans against property, consumer durable loans, life style loan, credit cards and the various digital products. 1. REVIEW OF LITERATURE PriyankaJha (2018) found that analyzing financial performance of public sector banks (Punjab National Bank) and private sector banks (ICICI Bank) in India. Her objective was to assess and compare the financial performance of both the banks. The present study concluded that ICICI Bank has performed sounder as compare to PNB Bank. Dr.Gagandeep Sharma and Divya Sharma (2017) discussed comparison and analysis of profitability of top three Indian private sector banks. Their objective was to study the profitability ratios of top three private sector banks i.e. HDFC Bank, ICICI Bank and Axis Bank. The study concluded that HDFC Bank is found to be consistent on the basis of cost to income ratio and return on net worth. Pawan and Gorav (2016) this study is related to a comparative study on financial health ICICI Bank and Axis Bank. Their objective was to measure and compares financial performance and health of ICICI Bank and Axis Bank. The study concluded that Axis Bank performs well on earning per share, assets turnover and debt-equity parameters. Overall performance of Axis Bank is good to compare ICICI Bank. Sanjib Kumar Pakira (2016) examines his research growth performance analysis a comparative study between SBI and HDFC Bank Limited. His objective was to analysis the growth rate in SBI and HDFC Bank limited as both the banks are giant banks in public and private sector. In this research work the researcher found that HDFC Bank has performed much better than the SBI Bank. Dr. RashmiSoni (2015) evaluated performance rating of failed new private sector banks in India. His main objective was identifying the banks that have failed performed poorly or merged with big banks after obtaining the banking licenses and calculating various ratios for each parameter of the CAMELS framework. The study concluded that HDFC and Kotak Mahindra Bank are rated highest in the earnings and profitability. Dr. Mukund Sharma (2014) examined performance of Indian Public and Private Sector Banks. His objective was to study the performance of public sector banks and private sector banks based CAMEL framework. It was found that private sector banks were better than public sector banks in utilizing the available resources such as assets and employees. Volume 8, Issue 11, November 2019 139 http://adalyajournal.com/ ADALYA JOURNAL ISSN NO: 1301-2746 Dr.K.Srinivas and L. Saroja (2013) conducted a study to compare the financial performance of HDFC Bank and ICICI Bank. From the study it is clear that there is no significance difference between the ICICI and HDFC Bank‟s financial performance but we conclude that the ICICI Bank performance is slightly less compared with HDFC Bank. NEED FOR THE STUDY The financial health Axis Bank and HDFC Bank is an extremely interesting topic for discussion. The decreasing of financial performance of the banking sector is caused by unsecured loans and advances. The RBI gives continuous physical force exerted on banks profitability and put forward for consideration several methods to reduce the unsecured loans and advances with changes in the social and economic objective of Axis Bank and HDFC Bank. It becomes findings and remedial measures to make smaller the financial performance in the value of new banking systems. The approach of policy makers towards financial performance had changed, with the result that less profits and gains had become fact of life. This study had concentrated on analysis of the financial performance of Axis Bank and HDFC Bank. OBJECTIVES OF THE STUDY 1. To examine the financial performance of Axis Bank and HDFC Bank. 2. To compare the financial performance of the Axis Bank and HDFC Bank. SCOPE OF THE STUDY This research article concentrate on appraising any changes that perceived and revealed in the financial health of Axis Bank and HDFC Bank. Moreover, the study had attempted to identify areas so as to become better the financial health of Axis Bank and HDFC Bank. LIMITATIONS OF THE STUDY The study to suffer from certain limitations, due to constrains of time and resources. This research article is based on the secondary data and the limitations of utilizing secondary data may affect the results. The data is taken from annual reports, relevant journals and website of study banks. It may be possible that the data shown in the annual reports may be window dressed which does not show the actual position of the banks. Financial analysis is mainly done to compare the growth, profitability and financial soundness of the respective banks by analyzing the information contained in the financial statements. Financial analysis is to identify the financial strengths and weaknesses of the two banks balance sheet and profit and loss account. The study helps in understanding the financial Volume 8, Issue 11, November 2019 140 http://adalyajournal.com/ ADALYA JOURNAL ISSN NO: 1301-2746 position, growth and performance of the study banks. The financial statements are analyzed by various statistical tools and evaluating the relationship between the elements.